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Showing posts with label harvard. Show all posts
Showing posts with label harvard. Show all posts

Tuesday, March 26, 2013

Men, Women, and Status in Negotiations


Men, Women, and Status in Negotiations

EDITED BY PON_STAFF ON  / BUSINESS NEGOTIATIONS
A growing body of research suggests that status concerns vary depending on the gender of interested parties.
First, men tend to care more about status than women do. Using a university sponsored fundraising campaign, researchers Bruno S. Frey and Stephan Meier of the University of Zurich examined how social-comparison information affected contribution rates.
  • Male students who learned that a high percentage of students had contributed to the campaign were more likely to make a contribution than were female students who received the same information.
In the context of negotiation, professors John Rizzo of Stony Brook University and Richard Zeckhauser of Harvard University asked a group of young physicians about their reference groups and salary aspirations.
  • Male physicians compared themselves to reference groups that earned higher salaries than the ones female physicians selected. 
  • In addition, men’s salary reference points were more indicative than women’s of how much they earned later.
  • Finally, women tend to compare themselves to particular individuals whom they know, while men tend to assess themselves according to information about typical behavior.
For this reason, when negotiating, consider offering different social comparison information to men and women. You might tell a male prospective hire that you’re offering him more than you’ll give others with his qualifications (assuming that is true).
When negotiating with a female prospect, you might be more specific:
“We recently interviewed someone similar to you, a Kellogg MBA with several years of consulting experience. To signal how much we want you to work for us, we’re offering you more than we offered her.”

To Improve Your Negotiation Skills, Learn from a Pro


To Improve Your Negotiation Skills, Learn from a Pro

EDITED BY KEITH LUTZ ON  / NEGOTIATION SKILLS
On February 16, in the midst of the National Basketball Association’s (NBA) All-Star weekend, members of the National Basketball Players Association (NBPA) unanimously voted to oust Billy Hunter as the union’s executive director.
“This is our union and we have taken it back,” National Basketball Players Association president Derek Fisher said, as reported by ESPN.com. Fisher said the union had been “divided, misled, [and] misinformed,” by its leader. Hunter hinted in a statement that he might contest his firing in court.
As the union’s leader since 1996, Hunter negotiated three collective bargaining agreements for NBA players, contributing to raising their average salaries to more than $5 million, the highest in team sports.
Divided Union
Conflicts between Fisher and Hunter divided union members during the 2011 NBA lockout. According to ESPN.com, “agents didn’t like [Hunter], questioning his bargaining strategies, and they were frustrated they didn’t have a bigger role in his union.”
After Hunter was accused of numerous indiscretions, Fisher pushed for a review of him. In its review, an independent law firm criticized Hunter for various conflicts of interests and poor decisions, such as hiring family members and friends and billing the NBPA for questionable travel and gift expenses. The review did not find Hunter guilty of any criminal activity, but three government investigations of Hunter are ongoing.
After the review was released, the members of the NBPA put Hunter on a leave of absence. About 35 NBA players attended the union committee’s annual meeting in February to discuss Hunter’s future.
Hunter’s Dismissal
NBA superstar LeBron James and longtime player Jerry Stackhouse reportedly took the lead in arguing for Hunter’s dismissal, according to the New York Times. James’s involvement was unusual: league superstars rarely get involved in the nitty gritty of labor negotiations and union management.
James “practically cross-examined the lawyers to prepared the report on Hunter,” the Times reports. And he and Stackhouse demanded explanations from committee members who previously had sided with Hunter rather than Fisher.
NBA players widely respect James for his business savvy and interpersonal skills. So it was not surprising, given James’s forceful arguments against Hunter, that the committee voted unanimously to release Hunter from his duties.
The situation speaks to the power of convincing influential parties to lead important negotiations. One well-respected and admired leader may be uniquely posited to wrap up a negotiation that took many behind-the-scenes players to engineer.

Wednesday, March 13, 2013

Successful negotiation tactic used for electric power In India


Finding the Right Process in India

EDITED BY PON_STAFF ON  / CRISIS NEGOTIATIONS
In 1995, a new government came into power in the Indian state of Maharashtra and canceled a 20-year power purchase agreement with the Dabhol Power Company, a joint-venture formed by Enron, General Electric, and Bechtel. Claiming that the deal was improper and even illegal, the government declared publicly that it would not renegotiate.
When the government recognized that it had no other options to secure power, it began to soften its position. But if renegotiations were to take place, the parties would need a process that would preserve the government’s dignity and prestige. Ultimately, the government chose to appoint a “review panel” consisting of disinterested energy experts to reexamine the project. The panel met with Dabhol representatives and project critics, and then submitted a proposal to the government that contained the terms of a renegotiated electricity supply agreement that both sides accepted.
The use of an expert panel to conduct what amounted to a renegotiation, in lieu of face-to-face discussions between the two sides, served to protect governmental dignity. The panel’s independent status also assured the public that the renegotiated agreement protected Indian interests.

Wednesday, March 6, 2013

Joint Gains in Negotiation


Crafting Joint Gains in Negotiation

 / NEGOTIATION SKILLS
While you might choose many processes for conducting your negotiations, we recommend the following three steps of a mutual-gains approach:
1. Identify and clarify interests. 
  • Some portion of your discussion should be dedicated simply to identifying your and the other side’s interests on the various issues being negotiated. Try recording interests on flip-charts, a whiteboard, or a shared computer for all to see. During this stage, parties should avoid making judgments about what the other side expresses. Instead, focus on asking clarifying questions to ensure that you fully understand each other’s interests.
2. Brainstorm possible value-creating opportunities.
  • Once you’ve made a complete list of interests, it’s time to brainstorm various options based on these interests. Ground rules are essential for brainstorming to be fruitful. For example, to boost creativity and minimize self-censorship, parties should agree to record all ideas without criticism or evaluation.
3. Evaluate options

Tuesday, February 19, 2013

Business Negotiations and the Return of the LBO


Business Negotiations and the Return of the LBO

 / BUSINESS NEGOTIATIONS
Computer giant Dell’s potential $23 billion leveraged buyoutcould mark the beginning of a new era of sky-high-priced acquisitions, writes Matt Wirz in the Wall Street Journal.
Dell founder Michael Dell and private-equity from Silver Lake Partners are seeking a reported $15 billion in financing as they shop the company. The last jumbo-sized leveraged buyout – an acquisition with a purchase price financed through equity and debt – took place back in the pre-recession era, when Blackstone Group purchased Hilton Hotels for $26 billion in 2007.
Private-equity firms have stockpiled about $550 billion in cash, reports Wirz, yet have avoided large deals for fear that economic slumps in Europe and the United States could make the deals difficult to finance. However, the firms are starting to think about wheeling and dealing again, given a recent rise in the stock market and record low costs for the debt that backs buyouts. Banks are also recognizing the potential benefits of lending at relatively high interest rates to highly leveraged companies.
In 2012, bankers arranging a deal for Fortescue Metals Group to raise $5 billion to repay existing debt found themselves facing demand for $10 billion from investors. The deal reportedly caused many in the private-equity business to speculate about how large of a deal they could do, Leland Hart, a managing director for the investment management firm BlackRock told Wirz.
Will the Dell deal mark the return to the heady days of big returns to investors and hefty fees for financiers?Some analysts predict Dell’s debt financing will be snapped up, while others are more pessimistic, given that the company has been in a slump due to slow sales in recent years.
High-priced mergers and acquisitions often fail to live up to the initial expectations of those involved. Yet due to the tendency of business negotiators and other decision makers to be overoptimistic and overconfident, it may be only a matter of time before billion-dollar LBOs are commonplace once again.

Dispute Resolution, NHL style


Dispute Resolution, NHL style

 / DISPUTE RESOLUTION
In the early hours of January 6, the National Hockey League (NHL) and the NHL Players’ Association (NHLPA) concluded a 16-hour mediation session by announcing they had reached agreement to end a 113-day lockout. The deal was finalized a week later, and the players returned to the ice for a shortened 2012-2013 season on January 19.
The dispute escalated as the two sides faced the task of negotiating a new collective-bargaining agreement beginning in July 2012. Citing a desire to bring player salaries in line with those of other professional U.S. sports leagues, the NHL opened with an aggressive proposal to reduce players’ percentage of hockey-related revenue from 57% to 43%, among other demands.
Offended by the proposal, the NHLPA held off a full month before delivering a counterproposal. Donald Fehr, the union’s lead negotiator, put forth an offer that separated player salaries from league revenue, slowing the growth of player salaries, and dividing revenues saved among financially struggling teams.
The team owners accused the union of ignoring their demand to greatly reduce player salaries. When the two sides failed to reach agreement by September 15, the expiration date of their existing contract, the league locked out the players and began cancelling games.
Weeks of cancelled game turn into months, and the season threatened to go the way of the NHL’s 2004 labor dispute, which led to the cancelation of the entire season.
The players eventually agreed to a 50-50 split of hockey-related revenue with the NHLPA. But the two sides remained at impasse on other issues, and a breakthrough didn’t come until federal mediator Scot L. Beckenbaugh entered the picture, according to USA Today.
When face-to-face negotiations got heated, Beckenbaugh separated the two sides and engaged in shuttle diplomacy, visiting each side in turn to identify issues where they were willing to be flexible.
The two sides reached agreement on a host of issues, but their deal ultimately hinged on the issue of player pensions. The team owners agreed to establish a pension plan similar to that of Major League Baseball players, with the teams making significant contributions to grow the plan. Previously, players were solely responsible for making voluntary contributions to the league’s retirement plan.
The agreement allowed NHL players, whose careers are often short, to concede on the short-term issue of salary in return for peace of mind regarding their long-term financial future. Winnipeg Jets defenseman Ron Hainsey, a key negotiator for the NHLPA, called the pension plan the “centerpiece” of the deal, reports USA Today.
The deal suggests a valuable way for business negotiators in all realms to break through thorny disputes: expand your focus by looking for tradeoffs that cut across time periods. Specifically, consider offering a long-term gain for the other side in return for a short-term concession that you value highly. By looking beyond the immediate future, you may be able to identify new sources of leverage—and resolve your dispute.